[17-206.

(a) (1) Subject to the requirements of this section, the lives of a group of
individuals may be insured under a policy issued to a creditor to cover debtors of the
creditor.

(2) The creditor to which the policy is issued is deemed the policyholder.

(b) (1) All debtors of the creditor whose indebtedness is repayable in
installments or in one sum at the end of a period not exceeding 18 months after the
initial date of the debt, or all of any class or classes of debtors determined by
conditions pertaining to the indebtedness or the purchase giving rise to the
indebtedness, are eligible for insurance under a policy issued in accordance with this
section.

(2) The policy may provide that the term "debtor" includes:

(i) a debtor of one or more subsidiary corporations; and

(ii) a debtor of one or more affiliated corporations, proprietorships,
or partnerships if the business of the creditor and of the affiliates is under common
control.

(3) A debtor is not eligible for insurance under the policy unless the
indebtedness is an irrevocable obligation to repay and is binding on the debtor during
the debtor's lifetime on and after the date the insurance becomes effective on the
debtor's life.

(4) The policy may exclude from the classes eligible for insurance classes
of debtors determined by age.

(c) (1) The creditor shall pay the premium for the policy:

(i) wholly from the funds of the creditor;

(ii) wholly from charges collected from insured debtors; or

(iii) partly from the funds of the creditor and partly from charges
collected from insured debtors.

(2) A policy on which the premium is to be paid wholly or partly from the
collection from insured debtors of identifiable charges not required of uninsured
debtors may not include, in the class or classes of debtors eligible for insurance,
debtors under obligations outstanding at its date of issue without evidence of
individual insurability unless at least 75% of the eligible debtors elect to pay the
required charges.

(3) A policy on which no part of the premium is paid from the collection
of identifiable charges not required of uninsured debtors must insure:

(i) all eligible debtors; or

(ii) all eligible debtors other than those who have evidence of
individual insurability that is unsatisfactory to the insurer.